EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619311
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Krinner Australia applied for a TCO in respect of certain plastic foundation screws on 01 December 2006.
Instrument
TCO No 0619311 was made on 02 March 2007. It declares that those certain plastic foundation screws are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0619311 is taken to have come into force on 01 December 2006.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0619311, made under the Customs Act 1901, was enacted in 2007 to address the issue of tariff concessions for specific goods that are not produced in Australia. This legislation was introduced to provide relief to importers by reducing or eliminating customs duty on certain goods, thereby encouraging their importation and use within Australia. The instrument was made by the Chief Executive Officer of Customs in response to an application by Krinner Australia for tariff concessions on certain plastic foundation screws, where it was determined that no substitutable goods were produced in Australia, thereby meeting the core criteria under the Act. The policy objective of this legislation is to facilitate the importation of goods that are not domestically produced, thus potentially lowering costs for businesses and consumers while encouraging trade. The instrument came into effect on the date the application was lodged, 1 December 2006, and does not disadvantage any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0619311 under the Customs Act 1901 applies to any individual or entity seeking tariff concessions for specific goods, in this case certain plastic foundation screws, which are subject to a lower rate of customs duty as declared in the instrument. The instrument is relevant to industries dealing with the importation of these goods and the transactions involved in such imports. The geographic reach of this legislation is national, as it pertains to customs duties governed by the Commonwealth of Australia. The Act does not specify exclusions or exemptions, but it clearly states that goods listed in section 269SJ of the Customs Act 1901 are ineligible for tariff concessions. The instrument extends the application of the Act by providing specific details on the goods qualifying for the concession and the applicable duty rates. The instrument came into force on 01 December 2006, the date the application was lodged, and it does not affect any pre-existing rights or impose new liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The main operative sections of this legislation focus on the process and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the CEO is satisfied that the application does not relate to goods specified in section 269SJ, which cannot be subject to a TCO, the CEO must then decide if the application meets the core criteria. According to section 269C, the core criteria are met if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must make a written order (a TCO) as per section 269P(3). This order declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the customs duty rate for those goods.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ, which cannot be subject to a TCO. The CEO also has the responsibility to determine if the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets these criteria, they must make a written TCO as per section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge a submission if they believe the TCO should not be made. The CEO must then consider any submissions received before proceeding with the TCO.
Breach of the provisions of the Customs Act 1901, including the process for making TCOs, can lead to various consequences. While the explanatory statement does not detail specific offences or penalties, it is reasonable to infer that failure to comply with the Act's requirements could result in legal action. For example, if an entity fails to properly apply for a TCO or the CEO does not adhere to the stipulated processes, this could lead to civil or administrative penalties. The precise nature and severity of these penalties would depend on the specific breach and relevant sections of the Customs Act. However, it is clear that adherence to the Act is crucial to avoid any adverse consequences.